Indian IT - Quo Vadis?

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Indian IT aspires to reach $ 60 billions by 2010 as per Nasscom-McKinsey report. The present export figures of Indian IT is $ 31 billions. Right now the market share of Indian IT offshore is 65% and BPO is 46% of Global IT offshore and BPO market respectively which is around $ 300 billions. But then why has India's exports grown only to $ 31 billions?
  • Indian cost is low comparatively but that is the pull factor influencing Indian IT.
  • MNCs are gaining a major market share by their captive units.
  • The supply is not corresponding to demand.
  • We are not able to meet the scale needed to meet the demand due to many constraints.

What are the constraints to our growth?

  • Inadequate talent to meet the demand. It is predicted there can be a shortage of 150,000 graduates in IT alone by 2010. This is going to be one of the major constraints. IT cos need to focus on demand and put in place adequate training programmes aimed at futuristic growth. Here attrition is going to be a big challenge.
  • Lack of world class operating practices barring the top tier IT cos. Acquiring more talent is not a solution to Scale and cannot provide the growth that IT cos aim. Superior world class operating practices are needed to deliver excellence, higher efficiency, higher operating margin and the ability to scale up.
  • Inability to provide adequate Leadership and Management through the organisation. Many IT companies have not invested into leadership training and hence face a shortage of leaders and mangers for their projects. They may have training programmes aimed at improving technical skills but not much of developing business leaders.
  • Integration problems with on site and off site platforms. Overcoming the Culture divide is the major obstacle in integration of on site and off site problems. Ability to perform in a multi culture work environment is becoming the order of the day in achieving global norms.
  • Infrastructure growth not in sync with growth. Infrastructure growth needs to rise to meet the aspirations of global market.
  • Poor branding and positioning that affects the marketing. Only the top three IT cos have invested in brand building exercise that will pay in the long run.

I would like to credit Mr. Noshir F Kaka, Partner, McKinsey & Co, Mumbai for his article in ET dated 01 May 07.

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